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Unlearnt lessons: On India’s inadequate strategic petroleum and gas reserves - The Hindu

21 May 2026 Source

Exam Summary

The article highlights India's significant vulnerability due to its inadequate strategic petroleum and gas reserves, a weakness underscored by recent retail price hikes, high crude costs, and rupee depreciation. While India's Strategic Petroleum Reserve (SPR) covers only about 7 days of consumption (or >70 days including commercial stocks), this is considerably less than the U.S. and China, which possess much larger reserves and have invested heavily in gas storage. The lack of sufficient LPG and LNG reserves, particularly underground storage for LNG vital for fertilizer production, further compromises India's energy security, limiting its ability to hedge against global supply disruptions and price volatility, unlike advanced economies and China.

GS Paper 3: Indian Economy and issues relating to Planning, Mobilization of Resources, Growth, Development and Employment (Energy Security, Infrastructure: Energy, Government Budgeting, Inflation, Balance of Payments). GS Paper 2: International Relations (India's foreign policy, impact of global events on India's interests).

Exam Themes

Prelims Takeaways

  • India's current strategic petroleum reserve (SPR) capacity is approximately 36.7-39 million barrels, covering about 7 days of consumption.
  • Combined with inventories of OMCs and import cover, India's total oil stock amounts to more than 70 days.
  • India is the world’s third-largest automobile market.
  • The U.S. SPR was built after the 1973 oil shock and has a capacity of 714 million barrels (currently ~400 million barrels, covering ~20 days of consumption).
  • China's SPR is roughly 900 million barrels.
  • The U.S. has emerged as the world’s largest oil producer (~13 mbpd).
  • The International Energy Agency (IEA) recommends a 90-day reserve for its members.
  • India has about 1.4 lakh tonnes of LPG storage, with daily consumption around 80,000 tonnes.
  • India largely relies on regasification facilities (e.g., Petronet LNG, BPCL) for LNG, lacking underground storage.
  • LNG is vital for producing fertilizers.

Elimination Traps

  • Confusing India's strategic petroleum reserve capacity (~7 days) with its total oil stock including OMCs (>70 days).
  • Misinterpreting 'strategic autonomy' solely as buying discounted oil, rather than the broader capacity to withstand supply shocks through robust reserves.
  • Assuming India has significant underground gas storage, when the article explicitly states a reliance on regasification facilities without such storage for LNG.
  • Overlooking the specific mention of LNG's importance for 'fertilizer production', which has implications for the agricultural sector.

Static Concepts

  • Strategic Petroleum Reserves (SPR)
  • Energy Security
  • Crude Oil
  • Liquefied Petroleum Gas (LPG)
  • Liquefied Natural Gas (LNG)
  • Regasification facilities
  • Under-recoveries (of OMCs)
  • Foreign Exchange Reserves
  • Inflation
  • Currency Depreciation
  • Spot Market (for commodities)
  • Long-term Contracts (for energy)
  • Strategic Autonomy (in energy policy)
  • Oil Shocks (e.g., 1973 oil shock)

Probable Question Areas

Question areas
  • Prelims
Question areas
  • 1. Which international organization recommends a minimum level of strategic petroleum reserves for member countries?
Question areas
  • 2. Compare India's strategic petroleum reserve capacity with that of the US and China in terms of days of consumption or total barrels.
Question areas
  • 3. What are the primary components of India's total oil stock?
Question areas
  • 4. Which of the following fuels is India most vulnerable in terms of strategic storage, lacking underground facilities? (LPG/LNG)
Question areas
  • 5. What is the significance of LNG for India's agricultural sector?
Question areas
  • Mains
Question areas
  • 1. "India's energy security remains a critical vulnerability despite efforts to build strategic reserves." Discuss this statement in light of recent global events and suggest measures to enhance India's energy resilience. (GS-III)
Question areas
  • 2. Analyze the economic and geopolitical implications of India's inadequate strategic petroleum and gas reserves. How can India achieve greater strategic autonomy in its energy policy? (GS-III, GS-II)
Question areas
  • 3. Examine the challenges and opportunities in expanding India's strategic petroleum and gas storage infrastructure. What role can public and private sectors play? (GS-III)
Question areas
  • 4. To what extent do global crude oil price fluctuations and geopolitical conflicts impact India's domestic economy and foreign exchange reserves? Discuss with reference to India's energy import dependence. (GS-III)
Conceptual Recurrence

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Recently, India signed a deal known as ‘Action Plan for Prioritization and Implementation of Cooperation Areas in the Nuclear Field’ with which of the following countries?

  1. A. Japan
  2. B. Russia
  3. C. The United Kingdom
  4. D. The United States of America
Explanation
Correct answer
B. Russia

* India signed the ‘Action Plan for Prioritization and Implementation of Cooperation Areas in the Nuclear Field’ with Russia. * India and Russia have a long-standing strategic partnership in the field of civil nuclear cooperation. * The agreement aims to enhance collaboration in areas such as nuclear fuel cycle management, nuclear power projects, and research in nuclear science and technology. * Russia has been a key partner in India's nuclear energy sector, particularly through Rosatom, which has been involved in building Kudankulam Nuclear Power Plant (KNPP) in Tamil Nadu. * Japan, the United Kingdom, and the United States have also engaged in nuclear cooperation with India but were not part of this specific agreement.

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With reference to India, consider the following statements:

1. Monazite is a source of rare earths.
2. Monazite contains thorium.
3. Monazite occurs naturally in the entire Indian coastal sands in India.
4. In India, Government bodies only can process or export monazite.

Which of the statements given above are correct?

  1. A. 1, 2 and 3 only
  2. B. 1, 2 and 4 only
  3. C. 3 and 4 only
  4. D. 1, 2, 3 and 4
Explanation
Correct answer
B. 1, 2 and 4 only

Monazite is a brown crystalline mineral consisting of cerium, lanthanum, other rare earth elements, and thorium. Monazite usually occurs in small, isolated crystals or grains that are resistant to weathering and become concentrated in soils. Statements 1 and 2 are correct. Monazite is a major source of rare earths and thorium. It yields several rare-earth elements, such as neodymium and praseodymium. Both of these are in demand internationally for making high-performance rare-earth magnets (components of power wind turbines, electric vehicles and robotics) Statement 3 is incorrect. Though monazite is found in most coastal areas of India. It is questionable to be found along the entire coast. The main mines are found along the coasts of southern India in Kerala, Tamil Nadu and in Orissa. Statement 4 is correct. Export of monazite without a license from AERB is a violation of the Atomic Energy (Radiation Protection) Rules 2004. Indian Rare Earths Limited (IREL), a wholly owned Public Sector Undertaking of the Government of India (GOI) under DAE, is the only entity that has been permitted to produce and process monazite and handle it for domestic use as well as for export.

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The term 'West Texas Intermediate', sometimes found in news, refers to a grade of

  1. A. Crude oil
  2. B. Bullion
  3. C. Rare earth elements
  4. D. Uranium
Explanation
Correct answer
A. Crude oil

* The term "West Texas Intermediate" (WTI), often seen in news reports, refers to a grade of crude oil. WTI is used as a benchmark for oil pricing in North America. * Specifically, WTI is a light, sweet crude oil, meaning it has a low density and low sulfur content. This makes it easier and more desirable to refine into gasoline and other products. WTI serves as one of the main benchmarks for oil prices globally. * West Texas Intermediate (WTI) and Brent Crude are two of the most important global benchmarks for crude oil prices. Brent Index is used as a benchmark for oil pricing globally, including Europe, Asia, and Africa.

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Consider the following statements about 'PM Surya Ghar Muft Bijli Yojana':

I. It targets installation of one crore solar rooftop panels in the residential sector.
II. The Ministry of New and Renewable Energy aims to impart training on installation, operation, maintenance and repairs of solar rooftop systems at grassroot levels.
III. It aims to create more than three lakhs skilled manpower through fresh skilling, and up-skilling, under scheme component of capacity building.

Which of the statements given above are correct?

  1. A. I and II only
  2. B. I and III only
  3. C. II and III only
  4. D. I, II and III
Explanation
Correct answer
D. I, II and III

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Consider the following statements:
Statement-I: India, despite having uranium deposits, depends on coal for most of its electricity production.
Statement-II: Uranium, enriched to the extent of at least 60% is required for the production of electricity.

Which one of the following is correct in respect of the above statements?

  1. A. Both Statement-I and Statement-II are correct and Statement-II is the correct explanation for Statement-I
  2. B. Both Statement-I and Statement-II are correct and Statement-II is not the correct explanation for Statement-I
  3. C. Statement-I is correct but Statement-II is incorrect
  4. D. Statement-I is incorrect but Statement-II is correct
Explanation
Correct answer
C. Statement-I is correct but Statement-II is incorrect

* Statement I is Correct : India has domestic uranium reserves, but they are not enough to meet the country's nuclear power generation needs. Additionally, some nuclear reactors in India use imported uranium. Coal remains the dominant source of electricity production in India, although its share is gradually decreasing.  * The major uranium deposits of the country occur in geological basins of the Singhbhum shear zone (Jharkhand), Cuddapah basin (Andhra Pradesh and Telangana), Mahadek basin (Meghalaya), Delhi Supergroup of rocks (Rajasthan) and Bhima basin (Karnataka). * Statement II is Incorrect : Nuclear power plants can utilise uranium enriched to varying degrees. India primarily uses Pressurised Heavy Water Reactors (PHWRs) that can function efficiently with low-enriched uranium (around 2-5% enrichment).

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Who of the following is the author of the books "The India Way" and "Why Bharat Matters"?

  1. A. Bhupender Yadav
  2. B. Nalin Mehta
  3. C. Shashi Tharoor
  4. D. Subrahmanyam Jaishankar
Explanation
Correct answer
D. Subrahmanyam Jaishankar

* Subrahmanyam Jaishankar is an Indian diplomat and politician serving as the Minister of External Affairs of India since 2019. He has authored two prominent books: * 'The India Way: Strategies for an Uncertain World' (2020) which provides insights into India's foreign policy approach. * 'Why Bharat Matters' is a compilation of his articles and speeches that delve into India's global significance.

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Consider the following statements:
1. CoaI sector was nationalized by the Government of India under Indira Gandhi.
2. Now, coal blocks are allocated on a lottery basis.
3. Till recently, India imported coal to meet the shortage of domestic supply, but now India is self- sufficient in coal production.

Which of the statements given above is/arc correct?

  1. A. 1 only
  2. B. 2 and 3 only
  3. C. 3 only
  4. D. 1, 2 and 3
Explanation
Correct answer
A. 1 only

Nationalisation: Yes, the coal sector was nationalised by the Indira Gandhi government in phases during the 1970s. Hence, Statement 1 is Correct. Coal block allocation: Coal blocks are not allocated through a lottery system. They are currently allocated through auctions, a shift from the previous system of administrative allocation. Hence, Statement 2 is Incorrect. Coal self-sufficiency: India is not entirely self-sufficient in coal production. While domestic production has increased, there is still a gap that is met through imports. Hence, Statement 3 is Incorrect.

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India is an important member of the ‘International Thermonuclear Experimental Reactor’. If this experiment succeeds, what is the immediate advantage for India?

  1. A. It can use thorium in place of uranium for power generation
  2. B. It can attain a global role in satellite navigation
  3. C. It can drastically improve the efficiency of its fission reactors in power generation
  4. D. It can build fusion reactors for power generation
Explanation
Correct answer
D. It can build fusion reactors for power generation

India is a key participant in the International Thermonuclear Experimental Reactor (ITER), a global nuclear fusion research and engineering megaproject. ITER is set to become the world's largest magnetic confinement plasma physics experiment, aiming to demonstrate the feasibility of fusion as a large-scale, sustainable energy source. India's involvement in ITER provides technological expertise, research collaboration, and industrial capabilities, which can significantly contribute to its future efforts in developing nuclear fusion reactors for commercial power generation. By participating in this international project, India gains access to cutting-edge advancements in fusion technology, potentially paving the way for its own fusion-based energy infrastructure.
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Consider the following statements:

Statement-I : Sumed pipeline is a strategic route for Persian Gulf oil and natural gas shipments to Europe.
Statement-II : Sumed pipeline connects the Red Sea with the Mediterranean Sea.

Which one of the following is correct in respect of the above statements?

  1. A. Both Statement-I and Statement-II are correct and Statement-II explains Statement-I
  2. B. Both Statement-I and Statement-II are correct, but Statement-II does not explain Statement-I
  3. C. Statement-I is correct, but Statement-II is incorrect
  4. D. Statement-I is incorrect, but Statement-II is correct
Explanation
Correct answer
A. Both Statement-I and Statement-II are correct and Statement-II explains Statement-I

Statement I is correct. The Sumed Pipeline is indeed a significant route for transporting oil and natural gas from the Persian Gulf to Europe. It bypasses the Suez Canal, offering an alternative path for these resources. Statement II is also correct. The Sumed Pipeline physically connects the Red Sea (where oil and gas are loaded onto ships from the Persian Gulf) with the Mediterranean Sea, providing a direct route for them to reach European ports. The connection between the Red Sea and the Mediterranean Sea established by the Sumed Pipeline directly explains its strategic importance for transporting oil and gas to Europe.  Statement II provides the geographical context for how Statement I functions.

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Consider the following:
1. Asian Infrastructure Investment Bank
2. Missile Technology Control Regime
3. Shanghai Cooperation Organisation

India is a member of which of the above?

  1. A. 1 and 2 only
  2. B. 3 only
  3. C. 2 and 3 only
  4. D. 1, 2 and 3
Explanation
Correct answer
D. 1, 2 and 3

India is a member of all the Organizations mentioned. Shanghai Cooperation Organisation: SCO has 10 full members: China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan (founding members), India, Pakistan (joined 2017), Iran (joined 2023), and Belarus (joined 2024). Missile Technology Control Regime: India became a full member of the Missile Technology Control Regime (MTCR) on June 27, 2016, becoming the 35th partner country and strengthening international efforts to prevent the spread of missile technology. Asian Infrastructure Investment Bank: India joined the AIIB as a founding member in 2015, signing the Articles of Agreement on June 29, 2015, in Beijing, becoming one of the 50 initial signatories to establish the multilateral development bank. India is the second-largest shareholder in the AIIB after China.

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